Market Insights
Article by Elisha
In line with our post last week outlining the key 36k level, today BTC kissed the 38.2% Fibonacci retracement and upper channel trendline and backed off (Chart 1).
Chart 1
This latest rally however, was less about spot ETF developments and more about macro forces. This is because a smaller than expected Treasury Q1 supply estimate yesterday and dovish FOMC sent bond yields tumbling and in turn risk assets soaring.
Whether this marks the start of a new global equity and bond uptrend remains to be seen, as the macro picture essentially remains unchanged, outside a correction of overly bearish bond sentiment.
As BTC spot price grinds higher however, perp funding, and term forwards (Chart 2), implied volatility and risk reversals (Chart 3) across the curve continue to remain or extend further at extreme elevated levels. For those positioned for this derivative implied upside breakout, the spot ETF approval cannot come soon enough!
Chart 2
Chart 3
Today after the bell we have Coinbase and Apple earnings, and NFP tomorrow – all of which could perhaps provide fuel to realize the implied volatility and especially lofty call premium.
Above all, it will take the spot ETF approval for us to start the new exponential leg higher. At the same time, we expect only a major rug pull from Gensler will be able to take us back below 32k at this stage.
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